Monday is President’s Day which means the US markets are closed today.
On the economic calendar, U.S. retail sales figures and the minutes of the Federal Reserve’s latest meeting will be the main events to watch this week. Market participants will also be closely following Thursday’s hearing before the House Financial Services Committee on the recent trading turmoil in GameStop (NYSE:GME) and other heavily shorted stocks, whilst Bitcoin is closing in on $50K!!
President Joe Biden’s $1.9 trillion Covid-19 relief package will move to the next stage during the week, with the House Budget Committee pulling all the components into a single piece of legislation.
Biden’s proposed spending package, coming on top of $4 trillion enacted by his Republican predecessor, Donald Trump, would have important consequences for a global economy that is slowly and unevenly recovering after last year suffering its worst downturn since the Great Depression of the 1930s.
On Friday, U.S. Treasury Secretary Janet Yellen urged G7 finance leaders to provide more fiscal support to promote a robust and lasting recovery, telling them “the time to go big is now.”
The Dollar Spot Index ended the week down by 0.62% to 90.480.
For Europe, on the monetary policy front, the ECB monetary policy meeting minutes are due out on Thursday. We can expect plenty of interest. In the last press conference, ECB President stood by the ECB growth forecasts. Lagarde did warn of downside risks, however.
The EUR ended the week against the USD up by 0.61% to $1.2120.
For the UK this week, expect the retail sales and services PMI numbers to have the greatest impact on the Pound.
The Pound ended the week against the USD up by 0.83% to $1.3849.
For Australia, January employment figures are due out on Thursday ahead of wage growth figures on Friday.
Expect the employment numbers to have the greatest impact. Consumer spending remains key to an economic recovery. A weakening in labour market conditions would test support for the Aussie Dollar.
The Aussie Dollar ended the week against the USD up by 1.08% to $0.7761.
With the Chinese market closed for Chinese New Year, there are no material stats to consider in the week.
The Chinese Yuan ended the week up by 0.12% to CNY6.4582 against the U.S Dollar.
For Japan, it’s a busy week with 4th quarter GDP, finalized industrial production figures, inflation figures, and prelim PMI numbers all coming up. The Japanese Yen ended the week up by 0.43% to ¥104.94 against the U.S Dollar.
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